June 05, 2011

Intel, Apple & the Transformation of the PC

If you're a PC and gadgets fan, then June is turning out to be quite the interesting month. Intel delivered a series of keynotes at Computex 2011 last week and Steve Jobs will be bringing the house down tomorrow when he takes the wraps off their latest operating system upgrades dubbed OS X Lion and iOS 5. Apple's blowout news of course will come from revelations about their all-new iCloud music service. In today's report, we'll take a look at some of the interesting new features that will be coming to our personal computers over the next 18 – 30 months. Intel presented some real surprises, especially their 2013 processor which is a whole new from scratch architecture. I liked what I saw on the way from Intel and I'll be thrilled to see what Apple delivers tomorrow. What a great month it's turning out to be for tech heads!

Clashing Views: The Future of the PC

A major clash of views emerged in the press last week between Intel and Appleconcerning the future of the PC. It began with keynotes from Intel's Sean Maloney and Mooly Eden at Computex 2011 in Taipei Taiwan on Tuesday May 31. At that time Intel openly admitted that a major transformation of the PC was being undertaken but that in context, it was simply the third such transition since the mid-ninety's: No more – no less.

In contrast, Apple's Tim Cook, according to Bill Shope of Goldman Sachs, stated that he saw "no reason why the tablet market shouldn't eclipse the PC market over the next several years." Being that Apple's World Wide Developer Conference begins tomorrow with the promise of delivering the goods on OS X Lion, iOS 5 and their new music cloud services – it was understandable why Cook was being so optimistic. Yet both companies are simply preaching for their own parishes or posturing for the media's attention.

There's no doubt that Apple currently has the wind at their back and that they're riding a massive wave of momentum due to the iPad. And with what will be coming out of Apple's developer conference tomorrow will only take more oxygen out of the PC world's balloon.

Yet to be fair, Intel did make a decent case for the PCs coming transformation in Taiwan last week – and a lot of what was being described could very well end up in future Macs: So not all was a loss. The problem, however, was that their vision was lackluster.

There's no doubt that Intel's customers are desperate to find that silver bullet that will finally blow out Apple's tires. Yet such a bullet will likely take another two or three years to emerge, according to Intel's own roadmap, and that's why leading PC companies like HP are being forced to leave the Mother Ship at this point in time so as to fill in the gap and take on Apple directly, now! HP's WebOS and upcoming tablets promise to deliver a quality alternative to the iPad and have their own music cloud surprises to take on Apple's forthcoming iCloud services later this summer: But that's another story for another day.

For today, our report will provide you with interesting new factoids, insights and a ton of interesting presentation slides to help you visualize the current and future states of the PC so as to help provide you with a balanced look at where personal computing is going, according to the Book of Intel.

Emerging Markets are Growing PC Growth

Like most Intel keynotes, they begin with charts, facts and figures that will form the foundation of their presentations. Two out of the three presentations at Computex 2011 began with a series of presentation slides on where future PC growth will be coming from over the next decade.

According to Mooly Eden, Corporate Vice President and GM of PC Client Group, two out of every three PC's sold next year will be attributed to Emerging Market Growth. Two out of three PC's will be notebooks and two out of three PC's will be sold to consumers.

As you could see below, there's an Intel slide illustrating the Total Amount of Market (TAM) Growth in various areas of the world. Interestingly, according to Eden, America will fall to number two next year with the People's Republic of China, or PRC, finally taking over as the leader in PC growth. Brazil will be number three.

To break those figures down even further, Eden stated that the growth coming from Asia Pacific (APAC) wasn't coming from countries that you'd think, like Australia, New Zealand or even Taiwan. The real growth was going to come from countries like India, the Philippines, Malaysia and Indonesia.

Intel's Vice President Sean Maloney brought another interesting fact to the table. He stated that by 2016, there will be over two billion PC users – doubling today's PC base. The affordability gap keeps another 3.5 billion out of the market. Closing the affordability gap is one the smartest strategy the industry can pursue, stated Maloney.

So in perspective, Tim Cook's commentary about tablets eclipsing the PC market is likely focused on traditional markets as opposed to the global market which still has enormous headroom for growth. The two clashing visions of the PC industry therefore are simply stemming from differing positions in the market. Steve Jobs stated back in 1996 that Apple lost the PC war long ago and so their indifference to its future is understandable – yet obviously skewed.

Think Computing, Not PC

From Intel's perspective, as indicated by their next slide, the thought of tablets eclipsing the PC market over the next several years just doesn't compute – unless Apple is trying to clump tablets in with smartphones under one gigantic "tablet" category. But that would be a marketing shell game and the stats below focus on computing in the four main categories as recognized by all analysts in the market: Smartphones, Personal Computers, Tablets and Netbooks.

In the bigger picture, Intel's focus is shifting from thinking and talking PCs to thinking and talking Computing. That honestly began back in 2009 when Otellini introduced the concept of "Building a Continuum of Computing." So while the press likes to overly play up the decline of the PC, it's really an old argument and an over simplification of what's really happening in computing in general.

Intel's 2011 chart shows tablets and netbooks being neck to neck at the moment and tablets getting the upper hand by 2014. Why 2014? Because that gives Intel time to get into that race which plays nicely into their version of the marketing shell game. Intel being "the source" of that data is of course suspect to say the least. Yet with that said – Computex 2011 was all about loudly banging the drum to announce that change was coming to both the netbook and Personal Computer: Huge change.

In 2010,Canalys Vice President and Principal Analyst Chris Jones stated that "Apart from the 'Apple effect', the iPad owes its success to a lack of advancement in other portable computing segments, such as netbooks." I think that Intel has heard this common complaint loud and clear as they tried to address this urgency for change.

Intel's Maloney stated that coming Medfield processors will power tablets and smartphones in 2012. They're being evaluated by Intel's customers at this very moment and will ship sometime between mid Q4 2011 and Q1 2012. The new Atom processors will provide better battery life, superfast computing, ultimate gaming and Advanced Imaging which copied Apple's Retina marketing imagery of the eye. On the tablet and smartphone front, Intel failed to impress once again.

But the real story was in Intel's main message of change to the Personal Computer.

Huge Changes are Coming to the Personal Computer

In Sean Maloney's keynote, he stated that "the PC must continue to evolve. Consumers are demanding new experiences and the PC has to be able to meet those demands. Simply put, the PC must undergo a major change – Again! Think back to the shift from the desktop centric computing model to the introduction of Centrino and mobility in 2003: That kind of change. So how do we do that? We do that from the inside out. How it looks, how it feels, how the user experiences it."

The first two new technologies coming to market soon are Smart Connect and Rapid Start. The latter takes the system and application states and puts them onto a dedicated Flash Drive which uses no power. To make that point, the demonstrator pulled the battery out of a notebook and then reinstated it. After opening the lid of the notebook, it only took 6 seconds to wake up without a reboot which you'd have to do if you removed the battery from a notebook today. There was a lot of applause for that announcement.

The third new technology on its way this fall is called Smart Response Technology which enables SSD-like performance with HDD capacity. In a nutshell, Eden stated that what they've done is combined the goodness of both by combining a very big hard drive complimented with 20 or 40 Gig of cache and make sure that the whole system appears to be running as if it was a solid state drive.

In terms of raw speed, Eden compared the differences between a pure SSD to an HDD and then to Intel's new smart response technology based drive-system. The times for a particular task came in respectively at 33 seconds for SDD, 58 seconds for the HDD and 34 second for Intel's Smart Response Technology based drive system. If we're to believe Intel's test results, then we could be in store for snappier drives on Macs this fall.

Intel Introduces Ultrabook

The three new features previously outlined will be at the heart of Intel's new Ultrabook category – which is a no compromise version of what the notebook could be. Intel boldly believes that the Ultrabook will represent 40% of the consumer market by the end of 2012.

Intel stated that their Ultrabook platform will enable a new user experience by accelerating a new class of mobile computers. These PCs will marry the performance and capabilities of today's laptops with tablet-like features and deliver a highly responsive and secure experience in a thin, light and elegant design that will include USB 3.0 and Thunderbolt.

The unit that Intel kept pushing on stage that is to embody the initial Ultrabook features was the Asus UX21 – which is really a copycat of Apple's MacBook Air.

Intel's Ivy Bridge Will Be an Unusual Leap Forward

The next evolution is just around the corner. With new advances coming to Sandy Bridge this fall being considered step one of reinventing the PC, Intel's Ivy Bridge represents step two. Intel's coming Ivy Bridge is built on their industry leading 22 nanometer process. It will bring power efficiency to the notebook PC and unrivaled security for consumers: identity theft protection, better encryption and automatic malware detection.

Interestingly, Ivy Bridge, according to Intel's roadmap, was to be a classic "Tick" in their famous Tick-Tock model. But according to Intel's Eden, "Ivy Bridge is going to be a big "Tick +" because in order to make sure that we could deliver the right user experience we decided to take a risk and implement architectural changes inside Ivy Bridge. And for that reason when you see Ivy Bridge, many of you will be surprised." In affect Intel is squeezing a two year cycle into one so as to accelerate the PCs transformation into something more appealing.

One of the key points that Eden tried to stress in his presentation was that Ivy Bridge's architecture would allow OEMs to custom design many kinds of devices with the one architecture. In respect to notebooks, the craze to go Ultra thin means that some snappiness could be lost if you're trying to do high end work. Yet for those wanting a snappy on-the-go system for simple apps like email, surfing, playing music and so forth, the new Ivy Architecture will rock. And if you need to edit photos, do some transcoding or play a game at home, you'll be able to ramp up the performance of your notebook with the assistance of next generation docking station solutions that will provide superior cooling systems.

Intel's 2013 Haswell Processer Changes Everything!

So why is Intel ramping up Ivy Bridge to be way ahead of schedule and include a new microarchitecture? Because Intel is rushing their new from scratch processor called Haswell for 2013 in an effort to take on ARM and any other wannabe competitor in the mobile space.

Perhaps Intel's marketing department should have dubbed this new processor Roswell instead of Haswell – because the way that Intel's Eden was promoting it sounds like it could be from out of this world. According to Intel's Eden, Haswell is going to be totally different platform from top to bottom. It's going to be a totally different architecture.

Evolution vs. Revolution

At the end of the day, two out of three Intel keynotes coming out of Computex 2011 this week focused on accelerating advances in the PC so as to generate more excitement for the PC sector in light of popular consumer devices like Apple's iPad. In the short term, Intel will jazz up Sandy Bridge processors for this fall and then deliver a wild leap in PC power in 2012 with their 22nm Ivy Bridge platform with USB 3.0, Thunderbolt, advanced security, cooler thermals promoting ultrathin designs and much-much more.

Yet Intel knew that the advances coming to Ivy Bridge wouldn't be enough to satisfy their developers or the media's desire to hear how they intend to respond to Apple's never-ending freight train run of innovation. So they uncustomarily opened up their 2013 roadmap to reveal an all new from scratch processor dubbed Haswell: It'll power a tablet when you want it; be a PC when you need it and provide you with an all-day battery. It almost sounded revolutionary and that's what Intel wanted to hang their hat on this week in Taiwan.

The only real problem with Intel's revelations is that many of their innovations will be left in the dust after Steve Jobs' keynote on Monday. Apple will finally take the wraps off their upgraded operating systems and reveal their all-new iCloud music service.

In the fall, Apple will deliver yet another new stream of advances to keep Intel and their developers up at night and it's this never ending cycle that is driving the traditional PC industry mad. Innovation is the engine to the mobile revolution and while Google's Android and HP's WebOS will make inroads this year no doubt, Apple's innovation and power to step on the gas on a moments-notice is what keeps Apple at the forefront of this revolution.